Occupy Occupational Licensure!

A recent commentary
in my local paper, Fosters Daily Democrat, warned that New
Hampshire
was threatened by imminent "chaos".
Also: the spread of scars, blindness, "diseases like HPV and AIDS" and
"crippling effects". In addition, "con artists and fly-by-night
businesses" would shortly blanket our fair state.

What could possibly bring about all these dire effects?
Why, it's all because of a small bill, HB
446, "AN ACT repealing the authority for regulation of certain
professional occupations" now wending its way through the legislative
process of the New Hampshire General Court. Specifically, the bill:

While it's not been on the front burner of the hot-issue stove,
there's a long and proud history of opposition to
occupational
licensure.
Way back in 1962, Milton Friedman
devoted an entire chapter of his classic
Capitalism
and Freedom to the issue. Here
is a John Stossel column on the topic from a few months back. A good,
state-by-state review by Adam Summers
was published in 2007 by the Reason Foundation.
Economist Adam Ozimek offered a pair of blog posts
last year describing why both conservatives
and liberals
should care more about the issue.

You can check out those sources for more detailed arguments.
But here's a brief summary:

Such laws restrict
economic liberty, with no rational justification based on a compelling
government interest.

Innovation and flexibility in providing licensed
services is stifled.

The laws give rise to a privileged class, who, in
an inherently corrupt setup, set
the rules for entry into their profession; these rules are invariably
used to decrease competition, and raise incomes for the class.

There's
also a lucrative side venture involved for people involved in training,
and supplying
credentials for prospective entrants. They also become, unsurprisingly,
strident advocates for licensing.

Such laws hurt low-income people disproportionately: first, by
raising prices for consumers, and also by raising the financial
barriers to their possible entry into the licensed profession.
(The Institute for Justice has done some good-guy
work in litigating some cases of the latter.)

The whole enterprise smacks of government
paternalism, an odious state-knows-best attitude where consumers
and producers are deemed incapable of arriving at mutually beneficial
agreements on their own.

It's an inherent slippery-slope game: once a state licenses professions
A, B, and C, it makes it much easier to do the same for D, E, F: "You
did it for them, so don't we deserve the same?" Unsurprisingly,
by most measures, occupational licensure is on the rise
in the US.

Wouldn't you think the Live Free or Die state might be at least
relatively
free of occupational licensure? Unfortunately, according to
Summers' study, New Hampshire ranked fourth-highest in the
nation in the number of occupations for which you need the state's
permission to practice. (Number one, of course, is California, followed
by Connecticut and Maine. And New Hampshire was just slightly
behind Maine.)

As with much government regulation, the beneficiaries of occupational
licensure are a relatively small and easily identified
special interest group, the victims are mostly invisible,
and the costs are diffused to the general population. So it's no
surprise that the people making the most noise are the ones
who would be seeing increased competition from folks who hadn't jumped
through licensing hoops. (See, for example, the websites for
NH Beauty
Professionals; the American Massage Therapy Association,
NH Chapter; the New Hampshire
Athletic Trainers' Association; no doubt others.)

Equally unsurprising, their arguments are short
on facts, but filled
with lurid scenarios of Fear,
Uncertainty, and Doubt. Why, in the post-HB446 world, all the shysters
and con artists in the country will flock to New Hampshire, and the
normal citizens will wander the streets, blind, crippled, scarred,
diseased, and also have very bad haircuts!
I have a sneaky suspicion that they aren't so
much afraid that HB446 would fail; they're afraid that it would work.

All those anti-HB446 websites and commentaries urge you to contact
your legislators.
If you are a Granite Stater, Pun Salad encourages you to do the same, after
getting the arguments on both sides. I think it would be neat for
New Hampshire to serve as a little laboratory
of democracy on this issue.

Disclaimers:
Unquoted opinions expressed herein are solely those of the
blogger.

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